The Motor Trades Association of Australia has reiterated its opposition to IAG’s proposed acquisition of RAC Insurance, as the competition regulator considers a new application.

MTAA interim executive director Peter Jones says the proposal cannot be seen in isolation, with motoring club underwriting businesses in Queensland and SA already sold to insurers.

He says the implications of the deal extend beyond insurance markets to the thousands of independent repair businesses supporting motorists.

“When a small number of dominant insurers control large shares of the market, their bargaining power increases significantly,” he said.

“That can place pressure on independent repair businesses, restrict motorists’ ability to choose their preferred repairer and ultimately affect service outcomes for consumers.”

In December, the Australian Competition and Consumer Commission opposed the $1.35 billion acquisition under previous regulatory arrangements, meaning IAG had to reapply under the new regime that started in January to continue pushing its case.

Feedback to a survey closed last Thursday and the ACCC expects to complete an initial assessment by April 17.

RAC says its bid to partner with IAG reflects rising regulatory requirements, catastrophe risks and the greater capabilities a national insurer can bring.